Social housing in Jersey: introduction of a regulatory framework (P.120/2017) – comments

STATES OF JERSEY

SOCIAL HOUSING IN JERSEY: INTRODUCTION OF A REGULATORY FRAMEWORK (P.120/2017) – COMMENTS

Presented to the States on 16th February 2018

by the Environment, Housing and Infrastructure Scrutiny Panel

STATES GREFFE

2017  P.120 Com.

COMMENTS

1. On 7th December 2017, P.120/2017 – Social Housing in Jersey: introduction of a regulatory framework' – was lodged in the States Assembly by the Minister for Housing. Prior to the lodging of the Proposition, and subsequently, the Panel met with the Minister and her Officers on a number of occasions to discuss the proposals and to address some of the concerns raised. The Panel also raised questions via written correspondence to the Minister, the responses to which are appended to these Comments (see Appendix 1).
2. During discussions with the Minister for Housing, we also considered concerns that had been raised by Andium Homes in a written submission to the Panel in respect of the proposed regulatory framework for social housing (see Appendix 2). A number of these concerns are reflected in our Comments below.

The necessity for regulation

3. The  Panel's  main  concern  regarding  P.120/2017  is  whether  there  is  enough evidence to support the need for the introduction of statutory regulation and the establishment of an arm's-length regulator, at this time.
4. The Reform of Social Housing'(P.33/2013), which included proposals to introduce a regulatory framework for social housing, was adopted by the States Assembly on 16th May 2013. Furthermore,  as  noted  in the  Report  within  P.120/2017, draft legislation to establish a social housing regulator was developed as part of the Housing Transformation Programme, but was not brought forward due to a concern that the proposals lacked detail concerning how a regulator would work in practice.
5. However, at the time when P.33/2013 was adopted by the States Assembly, it was not envisaged that the Draft Public Health and Safety (Rented Dwellings) (Jersey) Law 201- (P.66/2017) (the "Rented Dwellings Law") would be developed and subsequently approved. This piece of legislation, which was adopted on 13th December 2017, will put in place a modern and appropriate legal regime for the regulation  and  maintenance  of  the  standard  of  rented  dwellings  in  Jersey. Essentially, the Law will place the social and private rental sector on an equal playing field by introducing "Decent Home Standards" for all rented dwellings. During the States debate, many argued that the Law was fundamental for ensuring the protection and safety of all of those renting properties in the Island. In addition, the  "Rent  Safe  Landlord  Accreditation  Scheme",  which  is  operated  by  the Environmental Health Team, is intended to ensure the provision of good standard and well-managed social housing, in both the social and private rented sectors.
6. In view of the above, the Panel questions whether the need for a regulatory framework and a regulator for social housing is justified, given the added protection that the new Rented Dwellings Law will provide. In addition, the Panel notes existing legislation that currently regulates residential rented accommodation in Jersey. For instance, social housing providers must comply with the Residential Tenancy  (Jersey)  Law  2011 and  establish  tenancies  in  accordance  with  the provisions of that Law.

7. In a written submission that the Panel received from Andium Homes, it was advised that during consultation dialogue with the Minister for Housing over the regulation framework proposals, it had been suggested that regulation of the private rented sector was not a priority, as private sector tenants would be adequately protected through the combination of the Residential Tenancy (Jersey) Law 2011 and the Rented Dwellings Law. Andium Homes has therefore argued that, as both Laws apply equally to all properties in the rented sector, the social housing tenants also benefit from that level of protection.
8. Another reason cited by the Minister for introducing social housing regulation is to maintain the necessary levels of confidence for government and private investors'. In respect of this objective, Andium Homes is of the opinion that this degree of confidence could be generated through non-statutory, contractual agreements. In the written submission it is noted that –

"Such contractual agreements are exemplified in the arrangements between Andium Homes and the States of Jersey. Amongst other things, these arrangements define the extent of the Company's activities, the significant annual return made by the Company each year, and the manner in which the company provides the States as sole shareholder or Guarantor, with confidence."[1]

9. Andium Homes has argued that the same contractual arrangements could be mirrored across the entire social housing sector, which would allow the States to have similar oversight of those organisations, and would mean that any additional legislation or regulation would be wholly duplicative and unnecessary[2]. Similarly, within its 2017 Annual Report, the Jersey Homes Trust noted that it had hoped that the Minister for Housing would avoid the delay of legislating and the cost of implementing a statutory-based alterative, with all its  "undesirable and unnecessary bureaucracy and cost", and instead resolve this policy by entering into bilateral agreements with each social housing provider.
10. At the various meetings with the Minister and her Officers, and within the written correspondence, the Panel raised both of these issues. We will address the response to each of these in turn. With regard to the existing legal framework for rented accommodation, the Minister for Housing argued that it would not adequately meet the objectives of the regulation. The Minister advised that legislation is intended to regulate the business activities of social housing providers in individual cases, whereas the proposed social housing regulation would provide a broader system for monitoring, assessing and reporting on the performance of the sector as a whole. For instance, the Minister told the Panel –

"Social housing regulation is an overarching framework to oversee the performance of social housing providers. In this respect, regulation goes beyond housing standards – it also includes matters such as communication and engagement with tenants, support for vulnerable persons and making sure that social housing providers contribute towards enhancing the local community. Regulation also takes into account financial management and

governance arrangements to ensure a sustainable and viable social housing sector."3

11. With regard to the use of contractual arrangements rather than statutory regulation, the Minister for Housing disagreed with the views of the social housing providers, referred to above, in recent correspondence. Whilst accepting that contractual and statutory regulation could both establish various performance requirements for social housing providers and the rights and obligations of the parties, the Minister is of the opinion that contractual regulation would not provide sufficient powers to direct  or  enforce  the  behaviour  of  those  providers.  As  stated  on  page 11  of R.132/2017 – Social housing in Jersey: introduction of a regulatory framework – consultation response and policy position of the Minister for Housing' – it is the Minister's view that a statutory form of regulation should be introduced, as was the expectation of the Housing Transformation Programme. The consultation response also states that the Minister is encouraged that the principle of regulation has been supported as a result of the consultation process.
12. In March 2017, the Panel was provided with a draft consultation response to the introduction of a regulatory framework for social housing. The response states that social  housing  providers  supported  the  introduction  of  a  contractual  form  of regulation, which was tailored to meet the circumstances of individual social housing providers, and took into account the level of financial support provided by Government. Furthermore, it was observed that a number of separate agreements relating to specific developments had been entered into between social housing providers and the Treasury and Resources Department, and that these agreements could be incorporated  under a  new single  contractual arrangement.  The draft response states that, as a result of these findings: "the Minister for Housing will adopt a contract-based approach to the co-regulation of social housing" and will work  closely  with  social  housing  providers  to  introduce  the  agreements.  It continues –

"The Minister will carry out a review of the operation of these arrangements within three years of their commencement in order to determine whether the contract approach is working effectively, or whether the introduction of a statutory framework is necessary."4

13. The Panel was concerned to find such disparity between the draft consultation response, which was made available to us in March 2017, but was not published, and the consultation response that was presented to the States as R.132/2017 on 7th December 2017.  As  far  as  the  Panel  is aware, the  consultation  closed  on 20th January 2017 and no further consultation took place with the social housing providers prior to the presentation of R.132/2017. The Panel questioned the Minister for Housing regarding the discrepancies between the 2 documents at a meeting on 5th February 2018. However, we do not feel that the Minister provided a clear and sufficient explanation and, as a result, the Panel is still uncertain as to why the Minister is not proposing the adoption of a contract-based approach, as requested by the social housing providers during the consultation process.

3 Written Correspondence, Strategic Housing Unit, January 2018

4 Draft Consultation Paper, Strategic Housing Unit, 29th March 2017

14. The Panel identified further disparities between the 2 documents in respect of the structure of co-regulation and the introduction of an independent regulator. The consultation considered oversight of the performance standards and an appropriate body to act as the regulator of social housing. As such, the consultation identified 2 possible options – the Minister for Housing or an arm's-length regulator.
15. When the Panel was first presented with P.120/2017, it had immediate concerns regarding the cost of regulation and the potential impact on social housing providers and, subsequently, the supply of social housing. It has been estimated that the cost of appointing an arm's-length regulator would cost in the region of £100,000 per annum; and it is assumed that the cost of the regulator will be met by a levy or registration fee on social housing providers. These costs, coupled with the licensing fees that will be charged to all rented dwelling landlords as a result of the adoption of the Rented Dwellings Law, could have a considerable impact on social housing providers.
16. Similar concerns were expressed during the consultation period, with a number of social housing providers questioning the justification for the costs of employing an independent regulator given the size of Jersey's social housing sector. It also advised that a number of respondents stated that the Minister for Housing should have oversight of social housing performance through the Strategic Housing Unit (including the Social Security Department which supported the cost-effective solution of regulation carried out by the Minister for Housing). It was noted that the States already played a regulatory role in respect of social housing providers – letters of comfort; trustee appointments; rights over the disposal of property; and step-in rights in the event of insolvency – and that this role simply needed to be formalised through revised contractual agreements.
17. The draft consultation which was produced in March 2017 stated –

"The Minister for Housing acknowledges the concern expressed by respondents about the need to appoint an arm's length regulator of social housing. The Minister shares concerns about the costs that appointing a regulator might create and whether the appointment of a regulator would be a proportionate measure in view of the small-scale of social housing provision in Jersey.

The Minister has therefore decided not to appoint an arm's length regulator for social housing. In view of the proposed co-regulation model, the Minister is of the view that social housing providers should be able to manage their own performance against the standards and government providing backstop' oversight. It is therefore proposed that the Minister for Housing will assume the role, which will be set out in the agreements with social housing provides"[3].

18. The Panel notes that, according to P.120/2017, it is now recommended that a regulator should be established on an arm's-length basis to provide assurance that it is independent in the performance of its functions. Again, it is not clear to the Panel why a change in direction has been made, and what new evidence is available to support the Minister's decision. The report accompanying the Proposition also states that an independent regulator would provide the necessary separation of policy and regulatory framework that was envisaged by P.33/2013. In its submission

to the Panel, Andium Homes argues that the current arrangements, whereby the Minister for Housing sets the housing policy for the Island, Andium Homes delivers the outcomes, and the regulation is carried out by the Treasury as Guarantor under the Terms of the Memorandum of Understanding (MoU), appears to more than adequately provide the degree of separation proposed in P.33/2013, which in turn generates the desired level of confidence.

19. Within P.120/2017, the States Assembly is being asked to agree, in principle, proposed components of a regulatory framework – one of these being the introduction of statutory oversight and governance arrangements for the assessment and prioritisation of housing need through the Affordable Housing Gateway. Again, it is not clear to the Panel how establishing access to the Gateway in law will enhance its function or help the Public understand to any greater extent how the system works.

Social Rental Sector vs. Private Rented Sector

20. When, or indeed if, statutory regulation of rented accommodation is introduced, the Panel is concerned that the current proposals only apply to social housing providers. During its meetings with the Minister for Housing and her Officers, we queried why the Proposition only proposed the regulation of social housing and did not include the regulation of private rented accommodation. The Panel was advised that the reason for this was that social housing providers carried out an important social role and received public funding; and therefore required appropriate public oversight to protect the rights and interests of tenants and to safeguard public and provide investment. For instance, social housing providers receive approximately £20 million of public funding per annum from Social Security under the Income Support provisions, and are entitled to receive part of the £250 million bond from the States of Jersey to help fund social housing projects. Furthermore, unlike private housing providers, social housing providers have access to rezoned land and are exempt from taxation on not-for-profit activities.
21. Although we recognise the various benefits awarded to social housing providers over landlords in the private rented sector, we also note that along with those benefits comes a commitment to comply with States' policy and provide a certain number of social rented dwellings. Furthermore, the private rented sector are also in receipt of public funding, albeit considerably less than the social housing rented sector. According to R.92/2017 (Social Security Department: Minister's Report 2016'), £9,520,000 of Income Support provisions were spent on housing individuals in the private rental sector in 2016.
22. During our meetings, the Minister for Housing explained that social housing providers house many vulnerable people, and thus it was felt that setting performance standards would ensure that adequate protections were in place for tenants. However, it could be argued that the private sector also house vulnerable people, and therefore should these tenants not be awarded the same protection? Unlike the private sector, social housing providers are expected to provide specialised buildings to accommodate vulnerable people and to ensure that the property is well-equipped for all circumstances. This point raises further concerns regarding the ability to peg social housing rents against market rents, as per the States' agreed 90% rental market policy. The private rental sector does not supply

such accommodation and therefore to compare the two in terms of costs does not seem possible or appropriate.

23. It was anticipated that the introduction of the new Rented Dwellings Law would put the social and private rented sector on a more equal footing. Each sector will be expected to provide properties that meet set standards, and both will be subject to licensing requirements. However, there is a concern that the current proposals will create a new division between the two. Interestingly, the draft consultation paper states that: "the Ministeragrees with the sentiments expressed by a number or respondents to the consultation that, as far as possible, there should be consistency between the social housing sector and the private rented sector."[4]
24. A former Health, Social Security and Housing Sub-Panel undertook a review of the Housing Transformation Programme in 2013 (S.R.6/2013). The Sub-Panel found a strong appetite for the regulation of the private rented sector to set and ensure delivery of consumer standards. Thus, one of the recommendations of its review was that "any regulation should beflexible enough to include the private rented sector in the future without significant and costly institutional change."[5] As far as the Panel is aware, the current proposals do not allow for such flexibility, and there is no intention to introduce regulation for the private sector in the future.
25. It is also worth noting the exclusion of Parishes from the proposals for regulation, and  absence from the  list of social housing providers  provided  on page 7 of P.120/2017. Similar to the former Health, Social Security and Housing Scrutiny Sub-Panel, Andium Homes recognises that the Proposition fails to take into account Parishes who operate small stocks of social housing along with organisations such as the Haigh Homes. The Panel would again question the Parishes' exclusion from any regulation that was to be introduced by the Minister for Housing, as all tenants should have access to the same protection.

Conclusion

26. In light of the above, and in the absence of strong evidence to support the introduction of statutory regulation for social housing or the establishment of an arm's-length regulator, the Panel questions the need for it at this time. Rather, we are of the opinion that it would be more appropriate for the Minister for Housing to introduce contractual agreements with social housing providers (and revisit the present Memorandum of Understanding with Andium Homes Limited), and to reassess the position in 3 years. Furthermore, this period would allow time for the new Rented Dwellings Law to embed, and for the Minister for Housing to undertake any necessary improvements to other legislation, namely the Residential (Tenancy) (Jersey) Law 2011, in order to strengthen the existing legal framework for rented accommodation.
27. The Panel notes that an amendment to the Proposition has been proposed by Deputy

M. Tadier of St. Brelade in respect of the private rented sector. Whilst the decision to accept the amendment is ultimately a decision for States Members, we would urge Members to consider the matter and the reasoning behind the Minister's

decision to exclude the private sector from the proposals. Whilst the Panel does not see a need for statutory regulation at this time, we do believe that, similar to the former Scrutiny Sub-Panel, any regulation that is introduced should include flexibility to incorporate private rented accommodation. Following the approval of the new Rented Dwellings Law, which puts the 2 rented sectors on a more equal footing, it would now seem counterintuitive to impose an additional financial burden and further regulation onto one sector.

28. Since the Minister for Housing lodged P.120/2017, she has announced that the Strategic Housing Unit is undertaking  2 projects: preparation of an Objective Assessment of Housing Need Report ("OANHR"); and a review of access to social housing in Jersey. The Panel welcomes both projects, and notes that the relevant work can be undertaken irrespective of the outcome of the debate on 20th February. It is worth noting, however, that the current Proposition is confined to regulation for social housing, and we would argue that without regulation of the private sector and the ability to assess its performance, it would be difficult to determine the housing needs of the Island as a whole.

APPENDIX 1

Minister for Housing  Strategic Housing Unit  

Residential rented accommodation – legislative framework

The following table sets out the legislation that regulates the letting and management of residential rented accommodation in Jersey:

It is important to draw a distinction between these pieces of legislation and the proposed statutory framework for social housing. Social housing providers are subject to the legal requirements governing the rented sector. They must, for example, comply with the Residential Tenancy (Jersey) Law 2011 and establish tenancies in accordance with the provisions of that Law. Moreover, they will be subject to the Public Health and Safety

(Rented Dwellings) (Jersey) Law 201- when it comes into force. However, it is not anticipated that there will be duplication between the above Laws and social housing regulation.

Foremost,  social  housing  regulation  is  an  overarching  framework  to  oversee  the performance  of  social  housing  providers.  In  this  respect,  regulation  goes  beyond housing standards – it also includes matters such as communication and engagement with tenants, support for vulnerable persons and making sure that social housing providers contribute towards enhancing the local community. Regulation also takes into account financial management and governance arrangements to ensure a sustainable and viable social housing sector.

Where social housing regulation does touch upon matters such as tenancy management and standards of social housing, it will not replace the existing legal requirements. Instead, these legal requirements are focused on how social housing providers conduct their everyday business activities, whereas social housing regulation focuses on the strategic and cross-sectorial aspects of social housing performance.

A performance standard set under social housing regulation may, for example, state that social  housing  providers  must  "provide  good  standard  homes"  or  "offer  tenants appropriate security of tenure".

In order to achieve the standards, social housing providers will need to demonstrate they comply with their legal obligations under relevant Laws. In relation to the maintenance of homes, an indicator may be how many dwellings meet the Decent Homes Standard under the Public Health and Safety (Rented Dwellings) (Jersey) Law, along with other issues such as the time taken to respond to tenants' requests for repairs. Likewise, in respect of security of tenure, a performance standard may relate to how many evictions were carried out each year in accordance with the Residential Tenancy (Jersey) Law 2011.

As such, the above legislation is intended to regulate the business activities of social housing  providers  in  individual  cases,  whereas  the  proposals  for  social  housing regulation will provide a broader system for monitoring, assessing and reporting on the performance of the sector as a whole.

Policy Principal Strategic Housing

Minister for Housing

Cyril Le Marquand House St. Helier , Jersey, JE4 8QT Tel: +44 (0)1534 440400 Fax: +44 (0)1534 440408

Deputy R.D. Johnson

Chairman

Environment, Housing and Infrastructure Scrutiny Panel Morier House

St. Helier

JE1 1DD

15 February 2018

Dear David,

P.120/2017 Social housing in Jersey: introduction of a regulatory framework

I am writing following our meeting on 4th January when we discussed the above proposition. In order to support the Scrutiny Panel's consideration of the draft social housing regulation proposals, I have set out below a response to several questions that I understand members had raised after our meeting.

The regulatory framework

At the outset, it is important to reiterate the objectives of social housing regulation. The proposals in P.120/2017 are intended to:

• Protect and promote the rights and interests of current and future social housing tenants.
• Safeguard public and private investment in social housing provision.

The  principle  of  regulation  received  wide  support  from  stakeholders  during  the consultation,  though  I  recognise  that  the  eventual  regulatory  framework  must  be proportionate to the local social housing sector. The consultation identified two options: a contractual approach or statutory regulation.

Contractual  and  statutory  regulation  can  both  establish  various  performance requirements for social housing providers, and the rights and obligations of the parties. Nevertheless, contractual regulation does not provide sufficient powers to direct or enforce the behaviour of social housing providers.

This is not to say there are currently significant issues with social housing providers, but the ability to maintain oversight and control over the performance of social housing providers is required in order to deal with the risk that, at some point, a social housing provider  may  not  demonstrate  satisfactory  performance.  In  these  situations,  it  is important to have a set of regulatory tools available in order to ensure that social housing providers continue to meet the aforementioned objectives.

Contractual regulation can be include powers such as injunctions through the Court, but this solution lacks the transparency that it paramount in any regulatory system, and lacks the urgency with which a regulator might need to take action in order to protect the rights  of  a  tenant.  Accordingly,  setting  out  the  range  of  enforcement  powers  in legislation is much clearer and more robust, especially when the potential consequences are so far-reaching.

Regulation must be considered in the context of the approximately £20 million that is paid each year from the Income Support budget to social housing providers. This is the single largest expense in the Income Support budget, and there is an expectation that significant and regular flows of public funds will be subject to regulatory oversight in order to ensure that that investment is being used correctly and delivers value-for- money.

The Treasury is, of course, the principal stakeholder for Andium Homes and there is a Memorandum of Understanding between the Minister and the company. This is a shareholder relationship that is, out of necessity, influenced by the requirement for Andium Homes to repay its investment. It does not, however, deal with housing policy matters such as rent levels, communication and engagement, or support for vulnerable tenants among other matters, which fall outside the financial imperative.

I have therefore determined that statutory is the preferred option – this includes the appointment of an arm's-length regulator, the position of which can only, of course, be created through statute. The establishment of a regulator will enable full separation of the policy and regulatory functions of the Minister for Housing, which was envisaged by P.33/2013. Separation of these functions will help the regulator take a long-term and holistic view of the social housing sector, acting as a conduit between tenants, social housing providers and government in the delivery of homes and housing services.

There is no need for regulation to be burdensome, and a straightforward legal framework provides clarity to all parties about the regulatory requirements and their respective rights and obligations.

In order to minimise the impact of statutory regulation, a co-regulation' model has been adopted in the proposed regulatory framework. Under this approach, government will establish the structure of regulation, including the appointment of a regulator, and social housing providers will be responsible for undertaking monitoring, assessment and reporting  of  their  performance  against  the  regulatory  requirements.  As  such,  the regulator will not take a proactive role in monitoring compliance with the regulatory requirements on condition that individual social housing providers present appropriate evidence of their performance.

The co-regulation approach recognises the primary responsibility that the governing bodies of social housing providers have for the performance of their organisation, and that they are accountable to stakeholders for the standard of services delivered, and for dealing with problems that might arise.

A regulatory framework also benefits social housing providers. It provides a tool that they can use to assess and monitor their performance, and ensure the provision of good quality services. In a similar way, it enables innovation and best practice to be shared across the entire social housing sector. This point was raised by the former Health, Social Security and Housing Scrutiny Sub-Panel, which stated that regulation must not

simply address the risk of service failure, but should encourage growth and consumer- oriented service delivery.

In this regard, one of the roles of a regulator will be to provide best practice guidance and to support the capacity of social housing providers to grow and access new funding. In addition, evidence from other countries has shown that regulation enables social housing providers to access private funding at competitive rates. For private lenders, the presence of statutory regulation is an important aspect of due diligence when deciding to lend and provides assurance that appropriate oversight exists to mitigate the potential risks to their investment.

Existing regulation

The existing legal framework for rented accommodation would not sufficiently meet the objectives of regulation. In essence, legislation is intended to regulate the business activities of social housing providers in individual cases, whereas the proposed social housing  regulation  will  provide  a  broader  system  for  monitoring,  assessing  and reporting on the performance of the sector as a whole.

For example, the Residential Tenancy (Jersey) Law 2011 establishes the legal route a social housing provider (and private landlords) must follow in order to evict a tenant. However, it does not address how many evictions a social housing provider has carried out over a given period. If, say, one social housing provider had evicted 10 tenants over a year, whereas another had evicted none, a regulator would wish to know why there was a difference between their performances in view of its objective to protect the rights of tenants.

Furthermore, if one social housing provider had failed to meet the Decent Homes Standard across its portfolio (as evidenced by interventions under the Public Health and Safety (Rented Dwellings) Law), but another had achieved the Decent Homes Standard on all its properties, a regulator would, again, wish to understand the reasons why there was such a difference and take action to ensure the social housing provider had a plan to meet the Decent Homes Standard.

This type of information is not only important for the regulator. Consistent, sector-wide information helps tenants to understand how their landlord is performing compared to another, and empowers them to hold their landlord to account for service delivery.

Moreover, existing laws focus on specific matters such as tenancy management and the standard  of  accommodation;  they  do  not  deal  with  other  matters  such  as  rents; communication,  complaints  and  engagement  with  tenants;  support  for  vulnerable people; and the contribution that social housing providers makes to broader community initiatives. These matters will be covered by the regulatory framework proposed in P.120.

Review of the Residential (Tenancy) Jersey Law 2011

There has not been a review of the Residential Tenancy Law since it came into effect, but I am aware that there are areas to the Law where changes could be made in order to strengthen the legislative framework for rented accommodation. For example, it may be possible to amend the Law to:

• establish the right of a landlord to enter a property with reasonable notice;
• establish minimum notice period requirements when a break clause is included in a tenancy;
• prevent "retaliatory evictions" where a tenant makes a complaint about property standards;
• introduce standard tenancy terms for repair and maintenance obligations; and
• introduce retrospective tenancy deposit protection.

These potential amendments are separate to social housing regulation and would apply to the entire rented sector, including private tenancies. A full review of the Residential Tenancy Law has not been identified as a priority at this point, and would need to be considered by the next Minister. However, it is important that we keep the effectiveness of legislation under review, and it would be opportune to do so in the near future as we continue to strengthen regulation of the rented sector.

Rent increases (link to RPI)

The Retail Price Index (RPI) is a standard method by which landlords may choose to increase the rent they charge. It is considered best practice to link rent increases to RPI, reflecting the additional costs that a landlord may experience as a result of inflation in the costs of goods and services.

I am conscious that the debate on P.120 is fast-approaching. Should you or Panel Members have any further questions before the debate, my officers and I would be happy to respond and provide you with additional information.

APPENDIX 2